offshoring

Whether you know it as Industry 4.0, the 4th Industrial Revolution, or Smart Industry, Manufacturing is going through a deep transformation, with changes that are centered around digitalization. While most industries are already on this digitalization path, the disruption is more visible and pronounced in manufacturing because it is expanding virtual data and processes into environments that have been fundamentally about physical products. This transformation has already started, and its impact is expected to be massive. Technical, economic, and social changes are expected across the whole manufacturing ecosystem, with jobs shifting from offshoring back to nearshoring. Strong technology elements driving this digital revolution include 3D printing, robotizing and automation, smart factory with IoT and machine learning, and supply chain digitization. Their impact is profound.

Since the late 1990s, offshoring has become a deeply entrenched practice at many North American organizations. However, changing economic factors and the emergence of formerly hidden problems with offshoring have led Gartner to look at compelling alternatives, notably domestic rural sourcing.

According to a McKinsey study, half of all outsourced projects failed to meet their expected goals – while an Information Week Survey showed that 40% of outsourced projects did not save money! Factors that contribute to these problems include issues with quality, time zone challenges, and added travel expenses, among others.

The dynamics of today’s global supply chain are changing rapidly because of volatile fuel costs, increasing wages in overseas locations, post-9/11 security concerns, and global economic issues.In this environment, some U.S. manufacturers and parts suppliers are exploring ways to claim a competitive advantage by bringing operations back to, or near to, the United States.

Companies exploring offshore software development often find an overwhelming array of options. For example, is India the best choice? What about China, Russia or Brazil? Time, distance and language barriers also make it difficult to assess the quality of offshore developers. How can businesses reduce the risks of offshoring?

Despite the fact that Software Executives are pressured to do more with less and cut costs to the bone, many see offshoring as a "threat." They know they need to go offshore - but where? And with who? What they want is an easier, better, more effective and safer way to use offshore programming resources.

This whitepaper asserts that moving to the next generation of software development and sourcing requires moving from art to science. Given how dependent we are on software as a foundation for every product and service, anything less creates a climate of risk, uncertainty, and unjustifiable costs that undermines our ability to compete in a global marketplace.

Doug Gold, chief financial officer of CoreObjects, a Los Angeles-based product development company with multiple locations across India, talks about how his company is overcoming the challenges of visibility and control within distributed software development projects.

Offshore development has been embraced by the vast majority of commercial software vendors and enterprise application development groups. Why? Because a world flattened by globalization makes it possible to improve competitiveness by taking advantage of the easy exchange of low-cost, high-quality technical skills.

This whitepaper outlines a way for organizations to build a modern framework for managing distributed teams that overcomes the structural challenges of working across far-flung locations, and ensures projects come in as expected—on time, on budget and on target with business goals. This framework reuses your existing development infrastructure to restore visibility and empowered decision making within your globally distributed software development projects.

During this podcast, you’ll hear from Thomas Koulopoulos, founder of Delphi Group, managing director of Perot Systems Innovation Labs, and author of Smartsourcing. A widely recognized authority on IT, innovation and the globalization of business, Tom was named one of the industry’s six most influential consultants by InformationWeek magazine.

This whitepaper is written as a guide to an alternative mechanism for project implementation for business owners holding responsibility to deliver IT solutions in the SOA space. It could also be of interest to those who would like to know more about how the phenomenon of offshore/onsite coordination, that emerged in the nineties, can be effectively applied towards realizing the promise of SOA.